General Mills, ConAgra Please Investors

General Mills Inc. (GIS - Analyst Report) and ConAgra Foods Inc. (CAG - Analyst Report) both topped analysts' forecasts on their second-quarter profit, as the deepening global economic slump forced more cash-strapped customers to dine at home. Price increases for their products and improved cost-control measures also helped the companies post better-than-expected results.

General Mills' net income fell 3.1% to $378.2 million, or $1.09 a share, in the quarter. Excluding certain one-time items, profit was $1.36 per share, compared with the consensus estimate of $1.22. The maker of Progresso Soup also boosted its 2009 earnings guidance, even after forecasting a 9% increase in costs. General Mills now expects to earn between $3.83 and $3.87 a share, from an earlier view of $3.81 and $3.85.

ConAgra posted quarterly earnings of $168.1 million, or 37 cents a share, down from $244.8 million, or 50 cents, a year ago. Excluding items, earnings were 43 cents, while analysts were looking for 38 cents a share. The company, which saw rising demand for its Chef Boyardee canned pasta and Orville Redenbacher popcorn, reiterated its full-year profit view of "slightly above" $1.50 per share.

Though the housing market downturn and rising unemployment have constrained casual diners, food companies are not taking chances. General Mills upped advertising spending for its Cheerios cereal, Pillsbury cookie dough and Betty Crocker cake mixes, while ConAgra promoted Banquet frozen dinners.

ConAgra shares were up nearly 10% at $16.52, while General Mills was up 14 cents at $61.39 in noon trade on the New York Stock Exchange. While ConAgra has shed 37% of its value this year, General Mills has gained 7.5% since January.

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